Apple buys “Beats by Dr. Dre” for $3.2 billion!

The Financial Times newspaper yesterday reported that Apple is in the final stages of negotiating a $3.2 billion acquisition of Beats Electronics, a startup behind the recently unveiled Beats Music streaming service and the maker of premium headphones and assorted audio accessories.

Dr. Dre, who co-founded Beats, has now seemingly jumped the gun on announcing the deal in a video published on Facebook, which has now been deleted because Apple – as I’m sure you know by now – is not fond of leaks…

He all but confirmed – drunkenly, it would seem – Apple’s rumored Beats buy in a video Tyrese Gibson – R&B singer-songwriter, actor and Dre’s “homie” – posted on his Facebook page.

The short clip showing Dre boasting about being “the first billionaire in hip-hop” has since been removed from Facebook.

“I’m the first billionaire in hip hop right here from the mothafucking West Cost,” he proclaims in an NSFW clip.

Here’s a YouTube version.

Take Dre’s claim with a pinch of salt as he was “drunk off of Heinekens”.

If the deal come through, Dr. Dre will take home nearly $1 billion. As Forbes points out:

Dre’s stake in Beats currently stands at somewhere around 20-25 percent. Capital gains taxes could take a bite out of his big payday, likely leaving him with a net worth in the neighborhood of $800 million.

It’s not quite enough to land on the Forbes 400, but it would easily make him hip-hop’s richest man, topping current champion Diddy by $100 million.

That Dre, 49, would all but confirm the Beats buy could be a PR move though I doubt the famous hip hop artist needs to piggy-back on Apple’s popularity – the man is an institution himself.

Beats was founded in 2006 by music producer Jimmy Iovine (pictured above) and hip-hop star Dr. Dre. Beats Audio technology can currently be found in select HTC handsets and on certain Hewlett-Packard notebooks.

Iovine also co-founded Interscope Records in the early 90′s, which later became part of the Universal Music Group. The New York Post claimed yesterday that the music mogul would be joining Apple as a special adviser to CEO Tim Cook on “creative matters.”

Last year, the music exec gave Walt Mossberg a nice history lesson on the rise and fall of the music industry, you can watch the entire AllThingsD interview here or check out highlights in the YouTube clip below.

According to the official website, Beats Electronics comprises the Beats by Dr. Dre family of premium consumer headphones, earphones and speakers as well as patented Beats Audio software technology and streaming music subscription service Beats Music.

And here’a short clip showing Steve Jobs and Dr. Dre talking about the iPod and iTunes in a video chat at Apple’s keynote almost a decade ago.

The Santa Monica, California headquartered Beats is going to pull in about $1 in revenue this year. That said, paying three times the revenue for a headphone company isn’t all that bad, according to Peter Kafka of Re/code.

Others don’t share his enthusiasm.

Jay Yarow of Business Insider, for example, cites a couple reasons why the deal “goes against the soul of Apple”.

What’s your read of the situation?

And what is Tim Cook thinking here?

Help us read his mind!

 

Viber acquired by e-commerce giant Rakuten for $900 million!

This is kind of interesting. The Wall Street Journal is reporting this morning that the popular voice call app Viber has agreed to a deal to be acquired by Rakuten for $900 million. For those unfamiliar with the e-commerce giant, it’s essentially Japan’s version of Amazon.

Viber is available on all major mobile and desktop platforms, and is one of Skype’s biggest competitors with over 300 million users worldwide. It was one of the first apps to allow 3G VoIP on the iPhone and it now supports land-line calls, messages and even push-to-talk…

Here’s the report from The Journal:

“Japan’s Rakuten Inc. 4755.TO +1.22% said it will acquire call-application maker Viber Media Inc. for $900 million, in the online retailer’s first major foray into voice communications.

The deal for Cyprus-based Viber, which lets users make Internet-based calls on smartphones and computers, expands the Japanese e-commerce giant’s global portfolio of services, which now spans e-readers, financial services, and the baseball team that until recently hosted star pitcher Masahiro Tanaka.”

And their statements from the press release:

“I am tremendously excited to welcome Viber to the Rakuten family. Viber delivers the most consistently high quality and convenient messaging and VoIP experience available. Additionally, Viber has introduced a great sticker market and has tremendous potential as a gaming platform. Simply put, Viber understands how people actually want to engage and have built the only service that truly delivers on all fronts. This makes Viber the ideal total consumer engagement platform for Rakuten as we seek to bring our deep understanding of the consumer to vast new audiences through our dynamic ecosystem of Internet Services.”

Viber CEO and Founder, Talmon Marco, underlined these synergies:

“Rakuten is one of the world’s most important Internet companies. It is truly dominant in its home market of Japan and has been rapidly expanding globally. This combination presents an amazing opportunity for Viber to enhance our rapid user growth in both existing and new markets. Sharing similar aspirations with Rakuten, our vision is to be the world’s No.1 communications platform and our combination with Rakuten is an important step in that direction.”

While the $900 million offer seems a bit small in comparison to other tech acquisition deals, it’s worth noting that Viber doesn’t make much money. It’s only recently began generating revenue via sticker sales and Viber Out, which allows users to call non-Viber numbers for a fee.

Rakuten, for its part, generates about $65 billion in revenue per year, and has recently made major investments in Pinterest, and Canadian e-book firm Kobo. There’s no word yet on its plans for Viber, but it appears that it’s going to continue to operate it as a standalone service.